Closeup of mallet being hit on stacked coins at table in courtroom

An Investment Industry Regulatory Organization of Canada (IIROC) hearing panel has accepted a settlement between IIROC staff and Worldsource Securities Inc. that will see the firm pay a $100,000 fine and $5,000 in costs after admitting to certain rule violations involving products held within its fee-based accounts that resulted in instances of clients being charged twice.

According to the settlement, the firm admitted it failed to adopt internal controls designed to prevent the double charging for clients who held mutual funds that paid embedded fees within fee-based accounts. As a result, Worldsource found that 236 accounts were charged almost $150,000 in excess fees, in total.

Worldsource also admitted to failing to identify and address a material conflict of interest in connection with a proprietary fund that was offered to clients without ensuring adequate disclosure.

The settlement notes that Worldsource implemented a compensation plan voluntarily to address the double charging and has undertaken changes to its internal policies to prevent similar issues in the future. The firm also beefed up disclosure involving the proprietary fund in 2015.